Pep Boys 2013 Annual Report Download - page 121
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THE PEP BOYS—MANNY, MOE & JACK AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years ended February 1, 2014, February 2, 2013 and January 28, 2012
NOTE 2—ACQUISITIONS (Continued)
The Company has recorded its initial accounting for this acquisition in accordance with accounting
guidance on business combinations. The purchase price of the acquisition was preliminarily allocated to
tangible assets of approximately $0.8 million and $0.1 million in intangible assets, with the remaining
$9.9 million recorded as goodwill. The goodwill was primarily related to growth opportunities and
assembled workforces, and is deductible for tax purposes. The Company expects to finalize its purchase
price allocation by the end of the 2nd quarter of fiscal 2014. The Company believes that any subsequent
adjustments to the purchase price allocation will not be material.
As the acquisition was immaterial to the Company’s operating results for year ended February 1,
2014, pro forma results of operations are not disclosed.
During fiscal 2011, the Company made three separate acquisitions. The Company acquired the
assets related to seven service and tire centers located in the Seattle-Tacoma area, the assets related to
seven service and tire centers located in the Houston, Texas area and all outstanding shares of capital
stock of Tire Stores Group Holding Corporation which operated an 85-store chain in Florida, Georgia
and Alabama under the name Big 10. Collectively, the acquired stores produced approximately
$94.7 million (unaudited) in sales annually based on pre-acquisition historical information. The total
purchase price of these stores was approximately $42.6 million in cash and the assumption of certain
liabilities. The acquisitions were financed through cash flows provided by operations. The results of
operations of these acquired stores are included in the Company’s results from their respective
acquisition dates.
The Company has recorded its accounting for these acquisitions in accordance with accounting
guidance on business combinations. The acquisitions resulted in goodwill related to, among other
things, growth opportunities and assembled workforces. A portion of the goodwill is expected to be
deductible for tax purposes. The Company has recorded finite-lived intangible assets at their estimated
fair value related to trade names, favorable and unfavorable leases.
The Company expensed all costs related to these acquisitions during fiscal 2011. The total costs
related to these acquisitions were $1.5 million and are included in the consolidated statement of
operations within selling, general and administrative expenses.
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